How to fill in/collapse an indented cylinder onto a face
Are you going to make this a super high resolution mesh later? You're going to want to clean up the faces that have 5 or more sides before you continue to progress. But that's an aside. The main thing you want to do at this point is get rid of that cylindrical shape. What you need to do about that is switch to face select mode, and alt + shift + right click the edge that flows with the shape of the round loop of the cylinder. This should select the entire cylinder. Delete these faces while still in face mode.

Now switch to vertex mode. Select the vertex where the floor of the object and the wall meet at the beginning of the remainder of the cylinder's curve. Make sure your 'pivot point for rotation and scaling' is still set to 'cursor'. Select the remaining vertex points that form the remainder of the cylinder on that side, and merge all of the points to one of the end points. Do the same thing on the other mirrored half of the mesh. Select the vertex.

If you need a more in depth explanation, lemme know.